Hi ild, <<Investment in China is increasingly becoming a competitive necessity>> is right, for now.
Fellow subscriber, I trust you have received and read your current issue (April 28th, 2003) issue of The Gloom, Boom & Doom Report that starts out so … Message 18895691 and ended with Fred J Sheehan’s “An Investor’s Manifesto”.
Some of the ideas contained in Sheehan’s article came in handy as an antidote last night as I tried to listen to the testimony of the benighted Maestro Greensputin on the Hill. The Maestro served up so much happy talk on his favorite subjects, productivity, globalization, housing refinance, and ‘I must not talk about the value of the dollar’.
I do not believe Greensputin will triumph over financial gravity and economic reality, but I am convinced that he will cost folks dearly while trying, first and foremost by trying to keep and/or reduce the nominal risk-free rate.
Now, with SARS, should it prove a persistent situation, the Maestro has another opportunity to release even more liquidity, to help J6P empty out his home equity and take a vacation, buy a Sony big screen TV, or whatever by dilute J6P’s risk-free savings with the same liquidity. This is an evil cycle. But, the domestic electorates do not know, understand, or care. The international electorates do, do, do, and are beginning to act to protect themselves.
On Andy’s read of the situation, I believe it is right, for now, but we should monitor the developing situation carefully, with full attention, because the situation may contain the causes for cataclysmic change to (a) way of life, (b) state/cost of globalization, and (c) investment loss/return.
My clients’ plans in China are still on, but implementations have been slowed, a lot.
Today is a public holiday in China/Hong Kong (Labour Day), feeling very much like all recent SARS-infected days, relaxed. Here is my view to a kill, or a crimson tsunami:
The Hong Kong stock market recently showed some life, but it may be early, because the damage to the entire tourism sector is mirroring that of the real estate segment, with humongous massive firings (agents, drivers, hotel staff) in the cards soon.
Before the institution of 10-day quarantine in Taiwan, promotional tours from Hong Kong to Taipei (2 night, 5-star, 1.5 hr flight) were offered at USD 120, inclusive of flight and lodging.
In HK, Victoria harbour-view suites with outdoor Jacuzzi are on offer at USD 250/night (50% discount), including Champaign breakfast. HK city tours are being offered to locals in order to keep the outsource bus operators busy.
I did some investigation on the details of buying a stock market trading right (seat) and the prices have fallen from the 1997 peak price of USD 1.2 mm to a range of USD 50-120k. The guy asking for USD 50k is really desperate for cash. I believe I can easily flipped to some mainlander at 100% mark-up, for a quick trade, building the foundation in time for a recovery, the timing of which Greensputin has admitted last night that he does not know.
Chugs, Jay |
